No 10yr gaurantee and cannot change mortgage

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    • #54364

      I have come to know that my builder has not arranged for 10yr new building gaurantee for the apartment I bought in 2003. What it means now is I am unable to change my mortgage to a different bank or to interest only mortgage with my current bank. My Solicitor who completed purchase is saying that she is in contact with buider to arrange this now (Don’t know if it is possible after 5years).
      1. In this situation with builder not sticking to legal requirement who is at fault. Whether my solicitor or the bank who did not check the paper works?
      2. If I stop paying mortgage because of this reason will the default procedures be activated? Is it sensible to pay mortgage without proper paper works?
      3. Does anyone clearly know if Spanish banks have recovered any money after repossessions from people living in UK if the bank does not sell property for the loan value?

    • #86801

      You’ve raised an interesting point and it partly explains why no solicitor has replied to you.

      I discussed this matter with a couple of solicitors and I got various responses such as it’s the builders responsibility and not theirs etc. So just like solicitors are negligent on collecting in bank guarantees they are also negligent on building guarantees – no surprise there!

      This highlights further differences between UK and Spanish conveyancing as to duty of care or even an implied duty of care. What annoys me always are the high conveyancing fees they charge and then the shoddy work they do. I would definitely put the blame with your solicitor which I guess he/she accepts and are now trying to sort this out for you. In the UK you would have no difficulty bringing a claim under their PI but I’m sure it would be no easy task in Spain. You would certainly need to review any initial letter of engagement which should have set out the scope of the assignment.

      I don’t believe you have any claim against your bank as they do not offer a conveyancing service and only do certain work to check the property against which they are lending in terms of valuation/existence and then register the mortgage etc. Anyone that tells you not to use a solicitor if you are availing of a mortgage because the bank will do all the work anyway is incorrect.

      So this should not any reason for you not to continue paying your mortgage. I’m surprised it’s even being picked up on re-mortgaging – shows you how not busy the banks are at the moment. It shouldn’t really have any impact on you selling your property as the buyer’s solicitor will more than likely not ask for the guarantee anyway.

      I am not aware of banks pursuing clients across borders but that said we are in difficult times. The legal department of Spanish banks are a strange bunch and they can’t do it themselves and they don’t like handing out work to those that can so nothing happens.

      No doubt numerous solicitors will now respond saying they certainly obtain building guarantees!!

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